FORM OF NEW CIHC PLEDGE AGREEMENT
dated as of August 31, 1995
between
CIHC, INCORPORATED
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
NEW CIHC PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of August 31, 1995,
is made between CIHC, INCORPORATED, a Delaware corporation (herein, called the
"Pledgor"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Administrative Agent for the Banks (each as hereinafter defined) and the holders
of the Senior Notes (as hereinafter defined) (the "Administrative Agent"). This
is the New CIHC Pledge Agreement referred to in that certain Credit Agreement
(as from time to time, in whole or in part, amended, modified, supplemented,
restated, refinanced, refunded or renewed, the "Credit Agreement"), dated as of
August 31, 1995, among Conseco, Inc (the "Borrower"), the financial institutions
who are or from time to time become party thereto (the "Banks"), The Chase
Manhattan Bank, N.A. and First Union National Bank of North Carolina, as
Documentation Agents for the Banks, The Bank of New York, The Bank of Tokyo
Trust Company, Credit Lyonnais Cayman Island Branch, Deutsche Bank AG, New York
Branch, Dresdner Bank, ING Capital Corporation, The Long-Term Credit Bank of
Japan, Ltd., Chicago Branch, NationsBank of Georgia, N.A., Shawmut Bank
Connecticut, N.A. and Societe Generale, as Managing Agents for the Banks, and
Bank of America National Trust and Savings Association, as Administrative Agent
for the Banks.
BACKGROUND:
1. Pursuant to the terms of the Credit Agreement, the Banks have agreed
to make certain Loans (as hereinafter defined) to the Borrower which shall be
used by the Borrower as provided in the Credit Agreement.
2. As security for the Loans and as a condition precedent to the making
thereof, the Banks have required that the Pledgor execute and deliver this
Agreement.
3. Pursuant to the Section 10.7 of (a) the Indenture dated as of
February 18, 1993 between the Borrower and Shawmut Bank Connecticut, National
Association, as trustee (as the same may be amended or modified, the "Conseco
Indenture"), and (b) the Indenture dated as of December 15, 1994 between CCP
Insurance, Inc. ("CCPI") and LTCB Trust Company, as trustee (as the same may be
amended of modified, the "CCPI Indenture", and together with the Conseco
Indenture, collectively called, the "Indentures"), subject to certain
exceptions, neither the Borrower nor any Significant Subsidiary (as defined in
the Indentures) may incur, issue, assume or guarantee any indebtedness secured
by a lien on
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any property or assets of the Borrower or any Significant Subsidiary, or any
shares of capital stock of any Significant subsidiary, without providing that
the Senior Notes (the "Senior Notes") issued pursuant to the Indentures shall be
secured equally and ratably with (or prior to) such indebtedness.
NOW, THEREFORE, in consideration of any Loan or other
financial accommodation heretofore or hereafter at any time made or granted by
the Banks to the Borrower and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor agrees
with the Administrative Agent, for the benefit of the Banks and the holders of
the Senior Notes, that:
SECTION 1 Definitions. Capitalized terms used herein, unless
otherwise specified, shall have the meanings assigned thereto in the Credit
Agreement; provided that such definitions shall survive any termination of the
Credit Agreement. In addition, when used herein the following terms shall have
the following meanings:
"BLHC" shall mean Bankers Life Holding Corporation, a Delaware
corporation.
"CCPI" - see Preamble.
"CCPI Indenture" - see Preamble.
"CLLC" shall mean Conseco L.L.C., a Delaware limited liability company.
"Collateral" - see Section 2.
"Conseco Indenture" - see Preamble.
"Indemnified Liabilities" - see Section 7(b)(vi).
"Indentures" - see Preamble.
"Issuer" shall mean each Wholly-Owned Subsidiary, BLHC, CLLC and any
other Person which is the issuer of any capital stock or Securities or other
Collateral pledged hereunder.
"Permitted Actions" - see Section 5(b).
"Pledged Shares" - see Section -2.
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"Secured Obligations" shall mean (a) the CCPI Senior Note Obligations
(as defined in the Credit Agreement), (b) the Conseco Senior Note Obligations
(as defined in the Credit Agreement), and (c) the Liabilities.
"Secured Obligee" shall mean, collectively, (a) with respect to the
CCPI Senior Note Obligations, the holders of the Senior Notes under the CCPI
Indenture (or their representative), (b) with respect to the Conseco Senior Note
Obligations, the holders of the Senior Notes under the Conseco Indenture (or
their representative), and (c) with respect to the Liabilities, the Banks or
Administrative Agent.
"Securities" shall mean securities (whether debt or equity) issued by
each Issuer (to the extent permitted by the Applicable Insurance Code and other
than obligations of each Issuer pursuant to the Servicing Agreements and
insurance policies or other insurance products which may constitute securities)
including, without limitation, the common and preferred stock, partnership units
and participations, notes, bonds, debentures, trust receipts and other
obligations or instruments, including debt instruments and tax-exempt securities
of each Issuer (including, without limitation, warrants, rights tied to
earnings, put and call options and other options relating thereto or any
combination thereof), or any instruments convertible into any of the foregoing.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect from time to time in the State of Illinois.
"Wholly-Owned Subsidiaries" shall mean, collectively, each Person
listed on Schedule 1 hereto and any other Person in which (other than directors,
qualifying shares required by law) 100% of the capital stock or other ownership
interests is owned, beneficially and of record, by such Person, or by one or
more of other Wholly-owned Subsidiaries, or both; provided that such Person is a
Significant Subsidiary of the Borrower.
SECTION 2 Pledge. To secure the prompt and complete payment and
performance of the Secured Obligations, the Pledgor hereby grants, pledges,
hypothecates, assigns, transfers, sets over and delivers unto the Xxxxxxxxxxxxxx
Xxxxx, xxx xxx xxxxxxx
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00000\000\00XXX0XX.000
of the Banks and the holders of the Senior Notes, a Lien on the following
(herein collectively called the "Collateral"):
(a) the shares of capital stock of each Issuer and all other
Securities, if any, described in Schedule 2 hereto, whether in certificated form
or otherwise, including the certificates representing or evidencing such shares
of capital stock or other Securities (herein called the "Pledged Shares"),
together with all cash, securities, interests, dividends, rights, notes,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Shares;
(b) all additional shares of capital stock of each Issuer and other
Securities from time to time acquired by the Pledgor in any manner including,
without limitation, any uncertificated Securities (which additional shares of
capital stock and Securities shall constitute a part of, and be, "Pledged
Shares"), and, in the case of certificated Securities, the certificates
representing or evidencing such additional shares, together with all cash,
securities, interest, dividends, rights, notes, instruments and other property
at any time and from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such additional shares;
(c) all other property hereafter delivered to the Administrative Agent
in substitution for or in addition to any of the foregoing, and all certificates
and instruments representing or evidencing such other property, together with
all cash, securities, interest, dividends, rights and other property at any time
and from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all thereof; and
(d) all proceeds, rents, issues, profits and returns of and from all of
the foregoing;
TO HAVE AND TO HOLD the Collateral, together with all rights, titles,
interests, privileges and preferences appertaining or incidental thereto, unto
the Administrative Agent, its successors and assigns, for the benefit of the
Banks and the holders of the Senior Notes, forever; subject, however, to the
terms, covenants and conditions hereafter set forth.
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The Pledgor agrees to deliver to the Administrative Agent, promptly
upon receipt and in the case of the Pledged Shares in due form for transfer
(i.e., endorsed in blank accompanied by undated stock or bond powers executed in
blank or registered on the books of the applicable Issuer) and, subject to the
provisions of Section 6 hereof, any Collateral which may at any time or from
time to time be in or come into possession or control of the Pledgor; and prior
to the delivery thereof to the Administrative Agent, such Collateral shall be
held by the Pledgor separate and apart from its other property and in express
trust for the Administrative Agent, for the benefit of the Banks and the holders
of the Senior Notes.
SECTION 3 Representations, Warranties and Covenants.
(a) The Pledgor represents and warrants to the Administrative Agent,
for the benefit of the Banks and the holders of the Senior Notes, that: (i) the
authorized and outstanding capital stock of, and the information as to, each
Issuer set forth in Schedule 3 is true and accurate in all respects, (ii) except
for Liens, claims and rights of third parties arising solely through acts of the
Administrative Agent, the Administrative Agent has and will continue to have at
all times as security for the Secured Obligations, for the benefit of the Banks
and the holders of the Senior Notes, a valid, first priority perfected Lien on
the Collateral and the proceeds thereof free of all Liens (except for the Lien
granted hereunder), claims and rights of third parties whatsoever; (iii) all of
the Pledged Shares and other Securities representing shares of stock pledged
under this Agreement (other than with respect to CLLC) are evidenced by
certificates, and the Pledgor has delivered to the Administrative Agent for the
benefit of the Banks and the holders of the Senior Notes for pledge under this
Agreement on the date hereof all of the certificates representing all such
Pledged Shares and other Securities; (iv) the Pledged Shares represent and will
continue to represent all of the issued and outstanding capital stock and other
Securities of each of the Wholly- Owned Subsidiaries and all of the issued and
outstanding capital stock of BLHC owned by the Pledgor; and (v) the Pledgor
will, at all times, keep pledged to the Administrative Agent, for the benefit of
the Banks and the holders of the Senior Notes, pursuant hereto all of the
capital stock and other Securities of (A) each of the Wholly-Owned Subsidiaries,
and (B) BLHC (which capital stock, surplus debentures and other Securities
(other than the capital stock of BLHC pledged under the Borrower Non-Shared
Pledge Agreement are owned by the Pledgor). The Pledgor agrees to endorse and
deliver to the Administrative Agent for pledge hereunder, promptly upon its
obtaining any thereof, any additional Collateral and to hold such Collateral,
pending such delivery,
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in trust for the Administrative Agent, for the benefit of the Banks and the
holders of the Senior Notes, separate and distinct from any other property of
the Pledgor. As of the date of any such delivery of additional Securities,
certificates or instruments to the Administrative Agent, for the benefit of the
Banks and the holders of the Senior Notes, the Pledgor represents and warrants
that (1) it will own such Securities, certificates and instruments free and
clear of any rights of any other Person (other than the rights created in the
Administrative Agent hereunder), (2) it will have good and marketable title to
said Securities, certificates and instruments and have the right to pledge such
Securities, certificates and instruments to the Administrative Agent, for the
benefit of the Banks and the holders of the Senior Notes, pursuant to this
Agreement, (3) it will have pledged to the Administrative Agent, for the benefit
of the Banks and the holders of the Senior Notes, as at such date, all of the
capital stock and other Securities of (A) each of the Wholly-Owned Subsidiaries
and (B) BLHC (which capital stock, surplus debentures and other Securities are
owned by the Pledgor, other than shares of BLHC which pursuant to Sections
10.7(iv) - and/or 10.7(vii) of the Indentures have been pledged to secure the
financing of the acquisition of such shares), and (4) the Administrative Agent,
for the benefit of the Banks and the holders of the Senior Notes, has a valid,
first priority perfected Lien on said Securities, certificates and instruments
and the proceeds thereof free of all Liens, claims and rights of third parties
whatsoever. All documentary, stamp and other taxes and fees owing in connection
with the issuance, transfer and/or pledge of the Pledged Shares and any other
Securities, certificates or instruments pledged hereunder have been paid and
will hereafter be paid by the Pledgor as such become due and payable.
(b) The Pledgor further represents and warrants to the Administrative
Agent, for the benefit of the Banks and the holders of the Senior Notes, that it
is the lawful owner of the Collateral, free of all Liens, other than the Lien
granted hereunder, with full right to deliver, pledge, assign and transfer such
Collateral to the Administrative Agent, for the benefit of the Banks and the
holders of the Senior Notes, as Collateral hereunder. The pledge of the
Collateral effected by this Agreement is effective to vest in the Administrative
Agent, for the benefit of the Banks and the holders of the Senior Notes, the
rights of the Administrative Agent in the Collateral set forth herein.
(d) The Pledgor additionally represents and warrants to the
Administrative Agent, for the benefit of the Banks and the holders of the Senior
Notes, that (i) each of the Pledgor
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and its Subsidiaries is a corporation or partnership duly organized or formed,
validly existing and in good standing under the laws of its state of
incorporation or formation, (ii) the execution and delivery of this Agreement
and the performance by the Pledgor of its obligations hereunder are within its
corporate powers, have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval if required), (iii) each of
the Pledgor and its Subsidiaries has received all material governmental consents
and approvals (if any shall be required) necessary for such execution, delivery
and performance (except governmental consents required by any Applicable
Insurance Code to foreclose on the Pledged Shares or Pledged Surplus
Debentures), and such execution, delivery and performance do not and will not
contravene or conflict with, result in any breach of, or constitute a default
under, any material agreement or instrument binding on it or result in the
creation or imposition of or the obligation to create or impose any Lien (except
for the Lien permitted hereunder) and (iv) this Agreement is the legal, valid
and binding obligation of the Pledgor, enforceable against the Pledgor in
accordance with its terms, except to the extent such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting the enforcement of
creditors, rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
(including, without limitation, good faith, materiality and reasonableness) or
at law).
(e) The Pledgor additionally covenants and agrees with the
Administrative Agent that, until the expiration or termination of the
Commitments and thereafter so long as any of the Liabilities remain outstanding,
the Pledgor will, unless the Administrative Agent and the Required Banks, for
the benefit of the Banks and the holders of the Senior Notes, shall otherwise
consent in writing:
(i) at the Pledgor's sole expense, promptly deliver to the
Administrative Agent, from time to time upon request of the Administrative Agent
or the Required Banks, such stock powers and other documents (including UCC
financing statements), satisfactory in form and substance to the Administrative
Agent, with respect to the Collateral as the Administrative Agent or the
Required Banks may reasonably request, to perfect, preserve and protect the Lien
created hereby, and to enable the Administrative Agent to enforce its rights and
remedies hereunder;
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(ii) not permit any of the Collateral (other than the membership
interests in CLLC) to be evidenced by uncertificated Securities; provided,
however, that should for whatsoever reason any of the Collateral become
evidenced by uncertificated Securities, the Pledgor shall automatically, without
request by the Administrative Agent, forthwith (A) notify the Administrative
Agent thereof, (B) cause the books and records of the Issuer of such Securities
to contain a notation of the Lien of the Administrative Agent, for the benefit
of the Banks and the holders of the Senior Notes, thereon, and (C) take such
other action as the Administrative Agent shall reasonably request so that the
Administrative Agent shall have at all times as security for the Secured
Obligations, for the benefit of the Banks and the holders of the Senior Notes, a
valid, first priority perfected Lien on the Collateral and the proceeds thereof
free of all Liens (except for the Lien granted hereunder), claims and rights of
third parties whatsoever; and
(iii) except as otherwise may be permitted by the Credit Agreement and
the Indentures, (A) not sell, assign, exchange, pledge or otherwise dispose of
or transfer any of its rights to any of the Collateral, (B) not create or suffer
to exist any Lien on or with respect to any of the Collateral except for the
Lien created hereby, (C) not make or consent to any amendment or other
modification or waiver with respect to any of the Collateral, or enter into any
agreement or permit to exist any restriction with respect to any of the
Collateral other than pursuant hereto, and (D) not take or fail to take any
action which would in any manner impair the enforceability of the Administrative
Agent's Lien, for the benefit of the Banks and the holders of the Senior Notes,
on any of the Collateral.
(f) Notwithstanding anything contained in this Section 3 to the
contrary, the Borrower agrees and acknowledges that it shall fully comply with
its duties and obligations under the terms of the Indentures, and nothing
contained in the foregoing shall be deemed to be a waiver or amendment of any
provision contained therein.
SECTION 4 Care of Collateral. The Administrative Agent shall exercise
reasonable care in the custody and preservation of the Collateral. In addition,
the Administrative Agent shall be deemed to have exercised reasonable care in
the
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custody and preservation of the Collateral if it takes such action for that
purpose as the Pledgor requests in writing, but failure of the Administrative
Agent to comply with any such request shall not of itself be deemed a failure to
exercise reasonable care, and no failure of the Administrative Agent to preserve
or protect any rights with respect to the Collateral against prior or other
parties, or to do any act with respect to preservation of the Collateral not so
requested by the Pledgor, shall be deemed a failure to exercise reasonable care
in the custody or preservation of the Collateral.
SECTION 5 Certain Rights Regarding Collateral and Secured Obligations.
(a) Subject to Sections 5(c) and 6 hereof the Administrative Agent may,
and upon the request of the Required Banks shall, from time to time, after the
occurrence and during the continuance of a Default pursuant to Section 12.1.3 of
the Credit Agreement as to the Pledgor or an Event of Default, without notice to
the Pledgor, (i) transfer all or any part of the Collateral into the name of the
Administrative Agent or its nominee or sub-agent, with or without disclosing
that such Collateral is subject to the Lien hereunder, (ii) notify any Person
obligated on any of the Collateral to make payment to the Administrative Agent
of any amounts due or to-become due thereunder, and (iii) enforce collection of
any of the Collateral by suit or otherwise.
(b) If at any time any Secured Obligee takes any or all of the
Permitted Actions (as hereinafter defined) whether such actions are taken before
or after any of the Secured Obligations shall be due and payable and without
notice to the Pledgor, such actions shall not affect the enforceability of this
Agreement. A Secured Obligee shall have taken a "Permitted Action" if it shall
(to the extent permitted by the Credit Agreement and the other Loan Documents):
(i) retain or obtain a Lien upon any property to secure payment and performance
of any of the Secured Obligations of such Secured Obligee or any obligation
hereunder, (ii) retain, obtain or release the primary or secondary obligation of
any Person, in addition to the Pledgor, with respect to one or more of the
Secured Obligations of such Secured Obligee, (iii) create, extend or renew for
any periods (whether or not longer than the original period) or alter or
exchange any of the Secured Obligations of such Secured Obligee, or release or
compromise any obligation of any nature of any Person with respect to any of the
Secured Obligations of such Secured Obligee, (iv) release or fail to perfect its
Lien upon, or impair, surrender, release or permit any substitution or exchange
for, all or any part of any property securing any of the Secured Obligations of
such Secured Obligee or any
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obligation hereunder, or create, extend or renew for one or more periods
(whether or not longer than the original period) or release, compromise, alter
or exchange any obligations of any nature of any Person with respect to any such
property or (v) resort to the Collateral for payment of any of the Secured
obligations whether or not the Administrative Agent (A) shall have resorted to
any other property securing any of the Secured obligations or any obligation
hereunder or (B) shall have proceeded against any Person primarily or
secondarily obligated with respect to any of the Secured Obligations (all of the
actions referred to in preceding clauses (A) and (B) being hereby expressly
waived by the Pledgor).
(c) The Administrative Agent shall have no right to vote the
Pledged Shares or other Collateral or give consents, waivers or ratifications in
respect thereof prior to the occurrence and during the continuance of a Default
pursuant to Section 12.1.3 of the Credit Agreement as to the Pledgor or an Event
of Default. After the occurrence and during the continuance of a Default
pursuant to Section 12.1.3 of the Credit Agreement as to the Pledgor or an Event
of Default, the Pledgor shall have the right to vote any and all of the Pledged
Shares and other Collateral and give consents, waivers and ratifications in
respect thereof unless and until it receives notice from the Administrative
Agent that such right has been terminated. The Pledgor agrees to deliver
(properly endorsed when required) to the Administrative Agent, after a Default
pursuant to Section 12.1.3 of the Credit Agreement as to the Pledgor or an Event
of Default shall have occurred and shall be continuing, promptly upon request of
the Administrative Agent, such proxies and other documents as may be necessary
for the Administrative Agent to exercise the voting power with respect to the
Pledged Shares and other Collateral then or previously owned by the Pledgor.
SECTION 6 Dividends, etc.
(a) So long as no Default pursuant to Section 12.1.3 of the Credit
Agreement as to the Pledgor or an Event of Default shall have occurred and shall
be continuing:
(i) Subject to the provisions of the Credit Agreement and
notwithstanding the provisions of Section 2(a) of this Agreement, the Pledgor
shall be entitled to receive any and all cash dividends and payments on the
Collateral which it is otherwise entitled to receive, but any and all Securities
and/or liquidating dividends, payments, distributions in property, returns of
capital made on or in respect of the Collateral, whether resulting from a
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subdivision, combination, reclassification or conversion of the outstanding
capital stock or other Securities of any or all of the Issuers or received in
exchange for the Collateral or any part thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which any or all of
the Issuers may be a party or otherwise, and any and all cash and other property
received in exchange for any Collateral shall be and become part of the
Collateral pledged hereunder and, if received by the Pledgor, shall forthwith be
delivered to the Administrative Agent or its designated nominee (accompanied, if
appropriate, by proper instruments of assignment and/or stock powers executed by
the Pledgor in accordance with the Administrative Agent's instructions) to be
held subject to the terms of this Agreement, and, until delivery to the
Administrative Agent, such Collateral shall be held by the Pledgor separate and
apart from its other property in trust for the Administrative Agent, for the
benefit of the Banks and the holders of the Senior Notes.
(ii) If the Collateral or any part thereof shall have been registered
in the name of the Administrative Agent or its sub-agent, the Administrative
Agent shall execute and deliver (or cause to be executed and delivered) to the
Pledgor all such dividend orders and other instruments as the Pledgor may
request for the purpose of enabling the Pledgor to receive the dividends or
other payments which it is authorized to receive and retain pursuant to Section
6(a)(i) above.
(b) Upon the occurrence and during the continuance of a Default
pursuant to Section 12.1.3 of the Credit Agreement as to the Pledgor or an Event
of Default, all rights of the Pledgor pursuant to Section 6(a) (i) hereof shall
cease and the Administrative Agent shall have the sole and exclusive right and
authority to receive and retain the dividends and other payments in respect of
the Collateral which the Pledgor would otherwise be authorized to retain. All
such dividends and payments, and all other distributions made on or in respect
of the Collateral which may at any time and from time to time be held by the
Pledgor, shall, until delivery to the Administrative Agent , be held by the
Pledgor separate and apart from its other property in trust for the
Administrative Agent, for the benefit of the Banks and the holders of the Senior
Notes. Any and all money and other property paid over to or received by the
Administrative Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Administrative Agent as
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additional Collateral hereunder and be applied in accordance with the provisions
hereof.
SECTION 7 Default.
(a) Upon the occurrence and during the continuance of a Default
pursuant to Section- 12.1.3 of the Credit Agreement as to the Pledgor or an
Event of Default, the Administrative Agent may exercise from time to time any
rights and remedies available to it under the Credit Agreement, the Uniform
Commercial Code or the other Loan Documents or otherwise available to it,
including, without limitation, sale, assignment, or other disposal of the
Collateral in exchange for cash or credit. If any notification of intended
disposition of any of the Collateral is required by law, such notification, if
mailed, shall be deemed reasonably and properly given if mailed to the Pledgor
at least ten (10) days before such disposition as provided in Section 15.3 of
the Credit Agreement. Any proceeds of any disposition of Collateral shall be
applied as provided in Section 8 hereof. No rights and remedies of the
Administrative Agent expressed hereunder are intended to be exclusive of any
other right or remedy, but every such right or remedy shall be cumulative and
shall be in addition to all other rights and remedies herein conferred, or
conferred upon the Administrative Agent under any other agreement or instrument
relating to any of the Secured Obligations or security therefor or now or
hereafter existing at law or in equity or by statute. No delay on the part of
the Administrative Agent in the exercise of any right or remedy shall operate as
a waiver thereof, and no single or partial exercise by the Administrative Agent
of any right or remedy shall preclude any other or further exercise thereof or
the exercise of any other right or remedy.
(b)(i) The Pledgor agrees that in any sale of any of the Collateral,
the Administrative Agent is authorized to comply with any limitation or
restriction in connection with such sale as counsel may advise the
Administrative Agent is necessary in order to avoid any violation of applicable
law (including, without limitation, compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the
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Administrative Agent or any Secured Obligee be liable or accountable to the
Pledgor for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.
(ii) Without limiting the rights of the Administrative Agent under any
other provision of this Agreement, and in addition thereto, the Pledgor agrees
that, to the maximum extent permitted by law, after a Default pursuant to
Section 12.1.3 of the Credit Agreement as to the Pledgor or an Event of Default
shall have occurred and shall be continuing, upon written request from the
Administrative Agent, the Pledgor shall or shall cause any or all of the
Issuers, as the case may be, to prepare, file and cause to become effective
promptly, registration statements complying with the Securities Act of 1933, as
amended, for the public sale of such of the Collateral as the Administrative
Agent may elect, and to take comparable action to permit such sales under the
securities laws of such jurisdictions as the Administrative Agent may designate.
The Pledgor further agrees to cause any or all of the Issuers, as the case may
be, to enter into and perform its obligations under one or more underwriting
agreements in connection therewith, containing customary representations,
warranties, covenants and indemnities and contribution provisions if requested
by the Administrative Agent. If such registration statements are filed, the
Pledgor agrees to cause any or all of the Issuers, (A) to keep any such
registration statement and related prospectus current and in compliance with
applicable federal and state securities laws so long as required to satisfy
applicable prospectus delivery requirements and (B) at the request of the
Administrative Agent at any time after the effective date of any such
registration statement, to use reasonable efforts to file post-effective
amendments to such registration statement so that the Administrative Agent's
sales of Pledged Shares or other Collateral will be covered by a current
prospectus and can be made in compliance with all applicable federal and state
securities laws.
(iii) The Pledgor further agrees, after a Default pursuant to Section
12.1.3 of the Credit Agreement as to the Pledgor or an Event of Default shall
have occurred and shall be continuing, and upon written request from the
Administrative Agent, to (A) deliver, and cause any or all of the Issuers to
deliver, to the Administrative Agent such information as the Administrative
Agent shall reasonably request for inclusion in any registration statement,
prospectus or offering memorandum or in any preliminary prospectus or
preliminary offering memorandum or any amendment or supplement to any thereof or
in any other writing prepared in connection with the offer, sale or resale of
all or any portion of the Pledged Shares or other Collateral,
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which information shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or necessary to make such
information not misleading, and (3) do or cause to be done all such other acts
and things as may be necessary to make such offer, sale or resale of all or any
portion of the Pledged Shares or other Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental agencies or instrumentalities, domestic or foreign, having
jurisdiction over any such offer, sale or resale.
Without limiting the foregoing paragraph, if the Administrative Agent
decides to exercise its right to sell all or any of the Pledged Shares or other
Collateral, upon written request, the Pledgor shall furnish or cause to be
furnished to the Administrative Agent all such information as the Administrative
Agent may request in order to qualify such Pledged Shares or other Collateral as
exempt securities, or the sale or resale of such Pledged Shares or other
Collateral as exempt transactions, under federal and state securities laws. The
Pledgor agrees to allow, and to cause any or all of the Issuers to allow, upon
request by the Administrative Agent, the Administrative Agent and any
underwriter access at reasonable times and places to the books, records and
premises of any or all of the Issuers; the Pledgor further agrees to assist, and
cause the Issuers to assist, the Administrative Agent, any underwriter, any
agent of any thereof, and any counsel, accountant or other expert for any
thereof, in inspection, evaluation, and any other "due diligence" action of or
with respect to any such books, records and premises; and the Pledgor further
agrees to cause any independent public accountant for any or all of the Issuers
to furnish a letter to the Administrative Agent and the underwriters in
customary form and covering matters of the type customarily covered by letters
of accountants for issuers to underwriters.
(iv) The Pledgor, upon the occurrence and during the continuance of a
Default under Section 12.1.3 of the Credit Agreement as to the Pledgor or an
Event of Default, further agrees that the Administrative Agent shall have the
right, for and in the name, place and stead of the Pledgor to execute
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral, and may, without demand,
presentment or notice of any kind appropriate and apply toward the payment of
the Secured Obligations in order of application set forth in Section 8 any
balances, credits, deposits, accounts or monies of the Pledgor held by the
Administrative Agent.
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(v) Without limiting the foregoing paragraph, upon the occurrence and
during the continuance of a Default pursuant to Section 12-1.3 of the Credit
Agreement as to the Pledgor or an Event of Default, the Administrative Agent
may, to the fullest extent permitted by applicable law, without notice,
advertisement, hearing or process of law of any kind, (A) sell any or all of the
Collateral, free of all rights and claims of the Pledgor therein and thereto at
any public or private sale or brokers' board, and (B) bid for and purchase any
or all of the Collateral at any such public sale free from rights of redemption,
stay or appraisal of the Pledgor.
(vi) The Pledgor further agrees to indemnify and hold harmless the
Administrative Agent, the holders of the Senior Notes and the Banks and each of
their respective officers, directors, employees, agents, successors and assigns,
and any Person in control of any thereof, from and against any loss, liability,
claim, damage and expense, including, without limitation, reasonable attorneys'
fees actually incurred (in this paragraph collectively called the "Indemnified
Liabilities"), under federal and state securities laws or otherwise insofar as
such loss, liability, claim, damage or expense was caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, any preliminary prospectus or the prospectus, or was
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities were
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Administrative Agent furnished
to the Pledgor in writing by the Administrative Agent expressly for use therein,
such indemnification to remain operative regardless of any investigation made by
or on behalf of the Administrative Agent or any successors thereof, or any
Person in control of any thereof. In connection with a public sale or other
distribution, the Pledgor will provide customary indemnification to any
underwriters, their respective successors and assigns, their respective officers
and directors and each Person who controls any such underwriter (within the
meaning of the Securities Act of 1933, as amended). If and to the extent that
the foregoing undertakings in this paragraph may be unenforceable for any
reason, the Pledgor agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. The obligations of the Pledgor under this Section 7(b)(vi) shall
survive any termination of this Agreement.
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(vii) The Pledgor and the Administrative Agent acknowledge that the
commissioners or departments of insurance of various states under all applicable
insurance laws, rules and regulations may have to consent to or approve any such
sale, transfer or other disposition of the Collateral and the terms and
conditions thereof. The Pledgor hereby waives and agrees not to assert against
the Administrative Agent or any Secured Obligee any claim that any such sale,
transfer or other disposition hereunder, or the terms or conditions thereof,
were not commercially reasonable because of any provision of any such insurance
law, rule or regulation or any matter related thereto.
SECTION 8 Application of Proceeds. All of the proceeds from the sale
or disposition of any item of the Collateral pursuant to the terms of Section 7
hereof and/or, after a Default pursuant to Section 12.1.3 of the Credit
Agreement as to the Pledgor or an Event of Default, the cash held as Collateral
hereunder, shall be applied by the Administrative Agent pursuant to Section
6.2(b) of the Credit Agreement; provided that each reference to "Borrower
Non-Shared Pledge Agreement" thereunder shall be deemed a reference to this
Agreement.
SECTION 9 Authority of the Administrative Agent. The Administrative
Agent shall have, and be entitled to exercise, all such powers hereunder (to the
extent permitted by the Credit Agreement) as are specifically delegated to the
Administrative Agent by the terms hereof, together with such powers as are
incidental thereto, for the benefit of the Banks and the holders of the Senior
Notes. As to matters not expressly provided for by this Pledge Agreement
(including, without limitation, enforcement or collection of this Pledge
Agreement) the Administrative Agent shall not be required to exercise any
discretion, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks (without instructions from the holders of the Senior Notes or
any representative thereof) and such instructions shall be binding upon all
Banks and all holders of the Senior Notes and their representatives. The
Administrative Agent may execute any of its duties hereunder by or through
agents or employees and shall be entitled to retain counsel and to act in
reliance upon the reasonable advice of such counsel concerning all matters
pertaining to its duties hereunder. Neither the Administrative Agent, the
holders of the Senior Notes, the Banks nor any director, officer or employee
thereof shall be liable for any action taken or omitted to be taken by it
hereunder or in connection herewith, except for its own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent shall not be responsible to
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any Bank or any holder of a Senior Note for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Pledge
Agreement or any other Loan Document or other support or security (including the
validity, priority or perfection of any Lien), or any other document furnished
in connection with any of the foregoing; provided that notwithstanding the
foregoing, the Administrative Agent shall comply with Section 4. The Pledgor
agrees to reimburse the Administrative Agent, on demand, for all reasonable
costs and expenses actually incurred by the Administrative Agent in connection
with the administration and enforcement of this Agreement and for all costs and
expenses of the enforcement of this Agreement (including, without limitation,
reasonable costs and expenses actually incurred by any agent employed by the
Administrative Agent) and agrees to indemnify (which indemnification shall
survive any termination of this Agreement) and hold harmless the Administrative
Agent, the holders of the Senior Notes and the Banks (and any such agent) from
and against any and all liability incurred by the Administrative Agent, any
holder of a Senior Note or any Bank or any such agent thereof hereunder or in
connection herewith, unless such liability shall be due to gross negligence or
willful misconduct on the part of the Administrative Agent, any holder of a
Senior Note or any Bank or such agent, as the case may be.
SECTION 10 Termination. The Pledgor agrees that its Pledge hereunder
shall (notwithstanding, without limitation, that at any time or from time to
time all Liabilities may have been paid in full) terminate only (a) when all
Liabilities (except Liabilities which by the terms of the Credit Agreement
survive the payment in full of the Loans and the termination of this Agreement)
(including, without limitation, any extensions or renewals of any thereof) and
all expenses (including, without limitation, reasonable attorneys, fees and
legal expenses) paid or actually incurred by the Administrative Agent in
endeavoring to enforce this Agreement, the Credit Agreement and the other Loan
Documents to which the Administrative Agent is a party or of which it is a
beneficiary shall have been finally paid in full and all other obligations of
the Pledgor hereunder and thereunder have been fully performed, and all
Commitments under the Credit Agreement have been terminated, or (b) pursuant to
the express provisions of Section 6.4 of the Credit Agreement. The release of
the Collateral pledged hereunder shall be subject to the provisions of Section
6.4 of the Credit Agreement; at which time the Administrative Agent shall
reassign and redeliver (or cause to be reassigned and redelivered) to the
Pledgor, or to such Person or Persons as the Pledgor shall designate, such of
the Collateral (if any) as shall not have been sold or otherwise applied by the
Administrative Agent pursuant to the terms hereof and shall still be held by it
hereunder, together
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with appropriate instruments of reassignment and release. Any such reassignment
shall be without recourse upon, or representation or warranty by, the
Administrative Agent or any Bank and at the sole cost and expense of the
Pledgor.
SECTION 11 Miscellaneous.
(a) All notices or other communications hereunder shall be given in the
manner specified under Section 15.3 of the Credit Agreement, whether or not then
in effect, and such notices shall be delivered to each Secured Obligee.
(b) This Agreement, and the terms, covenants and conditions hereof,
shall be binding upon and inure to the benefit of the parties hereto, and their
respective successors and assigns, except the Pledgor shall not be permitted to
assign this Agreement nor any interest herein nor in the Collateral, nor any
part thereof, nor otherwise pledge, encumber or grant any option with respect to
the Collateral, nor any part thereof, except in accordance with the terms of the
Credit Agreement.
(c) SUBMISSION TO JURISDICTION; WAIVER OF VENUE. EACH OF THE PLEDGOR
AND THE ADMINISTRATIVE AGENT (1) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY ILLINOIS STATE OR FEDERAL COURT SITTING IN THE NORTHERN DISTRICT OF
ILLINOIS OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DO S, AND EACH OF THE PLEDGOR AND THE ADMINISTRATIVE
AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE H AND DETERMINED IN SUCH ILLINOIS STATE OR FEDERAL COURT, AND
(II) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST THE OTHER
PARTY HERETO OR THE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY OF ANY
THEREOF, ARISING OUT OF OR RELATING TO THIS AGREE IN ANY COURT OTHER THAN AS
HEREINABOVE SPECIFIED IN THIS SECTION 11(c). EACH OF THE PLEDGOR AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF IN ANY
ACTION OR PROCEEDING (WHETHER BROUGHT BY THE PLEDGOR, ANY OF ITS SUBSIDIARIES,
THE ADMINISTRATIVE AGENT, ANY BANK OR OTHERWISE) IN ANY COURT HEREINABOVE
SPECIFIED IN THIS SECTION 11(c) AS WELL AS ANY RIGHT IT MAY NOW OR HEREAFTER
HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT
ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. EACH OF THE PLEDGOR AND THE
ADMINISTRATIVE AGENT AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
25605\091\10EXE4MB.001
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(d) At the option of the Administrative Agent, this Agreement, or a
carbon, photographic or other reproduction of this Agreement or of any Uniform
Commercial Code financing statement covering the Collateral or any portion
thereof, shall be sufficient as a Uniform Commercial Code financing statement
and may be filed as such.
(e) Subject to Section 15.1 of the Credit Agreement, the provisions of
this Agreement or the Credit Agreement (to the extent applicable hereto) may
from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the Pledgor and by the
Administrative Agent (at the request of the Required Banks), provided, however,
that no such amendment, modification or waiver which would adversely affect the
holders of the Senior Notes, shall in any event be effective unless the same
shall also be consented to by the holders of the Senior Notes (but only to the
extent, if any, required under the Indentures), or the Banks are similarly
adversely affected. Any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(f) The section headings in this Agreement are inserted for convenience
of reference and shall not be considered a part of this Agreement or used in its
interpretation.
(g) The Pledgor hereby expressly waives: (i) notice of the acceptance
by the Administrative Agent of this Agreement, (ii) notice of the existence or
creation or non-payment of all or any of the Secured Obligations, (iii)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever (except as otherwise required herein), and (iv) all diligence in
collection or protection of or realization upon the Secured obligations, or any
security for or guaranty of any of the foregoing.
(h) Any Secured Obligee may, from time to time, without notice to the
Pledgor, assign or transfer any or all of the Secured Obligations of such
Secured Obligee or any interest therein; and, notwithstanding any such
assignment or transfer or any subsequent assignment or transfer thereof, such
Secured Obligations shall be and remain Secured Obligations for the purposes of
this Agreement, and each and every immediate and successive assignee or
transferee of any of the Secured Obligations of such Secured Obligee or of any
interest therein shall, to the extent of the interest of such assignee or
transferee in such Secured Obligations, be entitled to the benefits of this
Agreement to the same extent as if such assignee or transferee were the
Administrative Agent; provided,
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however, that, unless the Administrative Agent shall otherwise consent in
writing, the Administrative Agent shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Agreement.
(i) The Pledgor agrees that, if at any time all or any part of any
payment theretofore applied by the Administrative Agent, any Bank or any holder
of Senior Notes to any of the Secured Obligations is or must be rescinded or
returned by the Administrative Agent, any Bank or any holder of Senior Notes for
any reason whatsoever (including, without limitation, the insolvency, bankruptcy
or reorganization of any of the Issuers), such Secured Obligations shall, for
the purposes of this Agreement, to the extent that such payment is or must
be rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by the Agent, and the pledge by the Pledgor
hereunder to be effective or be reinstated, as the case may Secured Obligations,
all as though such the Administrative Agent, such Bank or such been made.
(j) No action of the Administrative Agent permitted hereunder shall in
any way affect or impair the rights of the Administrative Agent and the
obligations of the Pledgor under this Agreement. The Pledgor hereby acknowledges
that there are no conditions to the effectiveness of this Agreement.
(k) All obligations of the Pledgor and rights of the Administrative
Agent or obligation expressed in this Agreement shall be in addition to and not
in limitation of those provided in applicable law or in any other written
instrument or agreement relating to any of the Secured Obligations.
(1) GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT
MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(m) This Agreement may be executed in any number of counterparts, each
of which shall for all purposes be deemed an original, but all such counterparts
shall constitute but one an the same agreement. The Pledgor hereby acknowledges
receipt of a true, correct and complete counterpart of this Agreement.
(n) The Administrative Agent acts herein as agent for itself, the
Banks, the holders of the Senior Notes and any and all future holders of the
Secured Obligations.
(o) The Administrative Agent hereby acknowledges that its exercise of
any rights or remedies hereunder shall be Administrative shall continue be, as
to such application by holder had not
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subject to any Applicable Insurance Code and agrees to first comply with any
Applicable Insurance Code in exercising its rights hereunder.
(p) WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE ADMINISTRATIVE
AGENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS
UNDER THIS AGREE AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY; THIS PROVISION IS A
MATERIAL INDUCEMENT FOR PARTIES ENTERING INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
CIHC, INCORPORATED
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Its: President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Its: Vice President
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SCHEDULE 1
WHOLLY-OWNED SUBSIDIARIES
Bankers National Life Insurance Company
National Fidelity Life Insurance Company
Jefferson National Life Insurance Company of Texas
Beneficial Standard Life Insurance Company
Great American Reserve Insurance Company
25605\091\10EXE4MB.001
SCHEDULE 2
LISTING OF STOCK PLEDGED
Pledged
State of Common Ownership
Entity Incorporation Shares Percent
------ ------------- ------ --------
Bankers National CIHC,
Life Insurance Incorporated/
Company TX 250,000 100%,
CIHC,
Incorporated/
Conseco L.L.C. DE Uncertificated 90%
Bankers Life
Holding Corporation DE 42,346,407 CIHC,
Incorporated/
54%
Conseco, Inc./
27.5%
Jefferson National Life
Insurance Company of
Texas TX 700,000 CIHC,
Incorporated/
100%
25605\091\10EXE4MB.001
SCHEDULE 3
LISTING OF STOCK
Authorized Issued and
Common Outstanding
Entity Shares Common Share
Bankers National
Life Insurance Company 300,000 250,000
Bankers Life
Holding Corporation 500,000,000 51,975,316
